www.professional-liability.com
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 | INFORMATION TECHNOLOGY, NEW MEDIA, COMPUTER CONSULTANTS, SOFTWARE DEVELOPERS, INTERNET SERVICE PROVIDERS, NETWORK ENGINEERS, WEBSITE DESIGNERS, PROGRAMMERS . . . What do all of these have in common? They all barely existed, just a few short years ago. At the rate technology is advancing, who knows where we'll be by the year 2004! |
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| It seems that computer; software and Internet technology is limited only by the immense collective imagination of those with the vision, the nerve (some might say, "chutzpah"), and the technical ability to make it happen! |
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| It's hard to imagine a world without Microsoft, AOL, Apple, Linux, Unix, Cisco, Sun, InterNIC, Amazon, Priceline, iVillage, and countless others. Yet, stop and think for just a moment - just how long have any of these been around? A few of these may not be around much longer. |
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| Most of us can recall when a Red Hat was nothing more than an article of clothing; an Apple was something you ate; Servers worked in restaurants; the only Networks were called ABC, CBS and NBC; computers were the size of a small car, and needed to be placed in a room cooled like a meat locker; and Floppy Disks were, well . . . floppy! |
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| Companies and technologies burst upon the scene overnight. Some survive; some thrive; some burn bright and fizzle out; some just fizzle. |
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| If someone just a few years ago had suggested that you add some Java to your site, you would have thought they were talking about installing a coffee machine at the office. HTML? GIF? FTP? C++? RAM? ISP? |
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| It's a brave new world . . . and it will be changing again, tomorrow! As those wonderful television ads for Cisco Systems ask, "are you ready?" |
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| Properly insuring today's technology-centered business and/or professional requires recognition of the risks involved. The potential liability exposures are evolving just as quickly - and unpredictably - as the state of technology itself. Just within the past few months the market for intellectual property infringement liability (copyrights, trademarks, etc.) insurance has tightened significantly due to the ongoing and very much unsettled litigation surrounding Napster and MP3. |
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| As is the case with any sort of change, it can spell "OPPORTUNITY" for those who recognize what's happening - or about to happen - and it can spell "DANGER" for those who don't! |
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| What if the computer system or software that you recommend, design - or even simply install - does not do what your client says it is supposed to do; does not do what you client claims that you promised it would? |
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| What if your client's system crashes, 24-hours after you upload that nifty custom application you wrote for them? Sure, systems can crash for any one of a million reasons - and you know that your code wasn't to blame. Go ahead and explain that to your client's CIO or EDP Manager. Of course, you'll have to do your explaining while he or she is explaining to their boss just who is going to pay for the recovery of the lost data; who is going to pay for their lost revenue; who is going to loose their job? |
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| How about that great new Website you designed that just went live? You know, the one that has that great comparison of your product or service with the competition? Oh, oh, that one . . . the Website that the competitor's attorney is referring to in the lawsuit that was just filed, alleging trademark infringement, libel, and a whole bunch of other things you don't quite understand. Yes, yes, THAT lawsuit . . . the lawsuit that is demanding damages of $2 Million. |
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| Oh, so you only designed the site; that you were only following your client's instructions; that you had no duty to verify the claims? Well, you may very well be absolutely correct! However, since you have been named as a defendant in the lawsuit, all you have to do is to hire an attorney and have him/her file an answer on your behalf, and hopefully get you and your firm dismissed as defendants. Oh, darn, there is that little matter of that $10,000 retainer the attorney wants, against his or her $300 per hour fee. Checkbook, please? |
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| What about that call you just got from your biggest client? They tell you that the new contractor you sent over last week did a great job! Wonderful! Oh, one problem, though . . . three printers and a scanner are missing from the office. Your client is sure that your contractor took them. Your client is equally sure that you will reimburse them! |
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| Then, there is that call you just got (gee, you sure do seem to be getting a lot of calls today!) from a client who says that while your people were running cable, the office receptionist tripped over some loose wires and broke her hip. Fortunately, your client explains that since this happened "on-the-job", the receptionist is covered by workers compensation. You breathe a sigh of relief . . . . Until you get the letter from your client's workers compensation carrier, telling you that they expect you to reimburse them, since the injury was caused by the work you or your staff were doing. Oh, they'll give you a few days to think about it, before they file the lawsuit. Can you spell, "subrogation"? |
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| No more calls . . . please! |
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| Today's information technology, computer, software & Internet professionals must have a well-thought-out insurance program to protect themselves, their company, their staff - and their reputation - in case of trouble. |
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| In fact, more and more potential technology clients are insisting upon seeing a "certificate-of-insurance" before they award that next contract. If you haven't been asked yet, you will be sooner or later . . . and it's probably going to be "sooner" than "later". |
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| I am pleased to tell you that we have a number of excellent insurance programs available, designed specifically for the computer, technology, EDP, network & Internet-related professional. Coverage options include professional liability ("errors & omissions" or "E&O"), general liability, property, first & third party fidelity ("bonds"), loss-of-income, hired & non-owned auto, workers compensation . . . and more! |
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| Our clients range from solo consultants, working from their homes, to large, multi-million dollar firms, with contracts spread across the country, as well as ISP's, B2B dot.com's & online retailers. |
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| Professional liability ("errors & omissions") is the foundation of a properly designed insurance program for technology related firms. Limits of liability are available from $1 Million, up to $25 Million. This coverage is so critical that we simply will not take on a client who does not carry, or refuses to consider professional liability. We're insurance professionals, and we expect our clients to be professionals as well. |
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| Premiums can vary widely, depending upon the exact nature of the insured risk. We all know someone who pays almost nothing for his or her automobile insurance, and we probably know someone else who pays a small fortune for the exact same coverage. The difference can be due in part to, 1) location, 2) driving record, 3) whether or not there are other drivers - such as a 17-year old son, who just got his license, 4) the car itself, 5) past claims history, and yes, it could also be, 6) their insurance company - some companies charge more than others! |
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| Well, the same principles apply in all types of insurance, including computer & technology related coverage. The cost is going to vary, depending upon the nature of the risk (exactly what type of work is being done), the experience of the insured, past claims or litigation (if any), the size of the operation (generally based upon gross annual revenues), etc. |
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| Another significant issue facing the emerging technology field is the fact that there does not yet exist any recognized, independent basis on which to determine the qualifications of technology professionals. Sure, there are many different "certifications" available - some of which are very valuable, while many others are virtually worthless. |
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| When a licensed professional - such as a lawyer, accountant, doctor, even an insurance broker is alleged to have made a professional error, there are at least some basic guidelines with respect to what level of professional conduct is expected of that individual. No such guidelines exist (yet) in the computer, networking, technology & Internet related fields. Anyone can print up some business cards and call him/herself a "computer consultant", or "network consultant", or "Website designer", or "certified Internet consultant." |
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| It's 100% legal, no question about it. However, as anyone in the industry knows, "legality" aside, the "reality" is that many of these so-called "experts" or "consultants" haven't a clue - and some are outright scam artists! |
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| The bottom-line - literally - is that each and every application for insurance coverage must be carefully evaluated by a knowledgeable broker and then submitted to equally knowledgeable underwriters, working with insurance markets comfortable with the specific nature of the risk. Not every client is going to be a "fit" with every insurance company or program. |
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| Differences include the limits of liability, scope of the coverage, deductible (sometimes referred to as the "retained limit" or "insured retention"), size and nature of the client, location, etc. etc. |
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| A final word of caution when it comes to insurance premiums: If there is a "substantial" difference in cost, then it is safe to assume that there is an equally "substantial" difference in coverage. Now, it may be that the additional coverage being offered by the more expensive policy isn't necessary, but never assume that you are being offered identical coverage for "half-the-price". Does it happen? Yes, sure it does. Does Ed McMahon actually show up on someone's doorstep with a check for $10,000,000? Yes, he sure does . . . but it's incredibly rare! |
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| Ask questions! Be an informed insurance buyer! After all, it's your money, and it's your business that you're protecting! Don't let any insurance broker - myself included - rush your decision. If you are not getting clear answers from your broker, translated into terms that you understand, then I suggest that it's time to find a new broker. |
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| I'd be happy to
discuss the specifics of your situation, and answer any questions
that you might have. You can click here
to fill out a quick &
easy form to get the ball rolling. If you'd prefer to, you can
call me at, 877-320-4061, or you can send me e-mail
at, insurance@professional-liability.com. |
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| One final request: Please don't send a message asking me to just e-mail you a quote. Frankly, if that's how you handle an important issue like your professional liability insurance, I don't want you as a client; though I'm sure that you can find any number of second-string insurance brokers willing to play the "cheap insurance" game. |
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| I look forward to hearing from you. |
Bruce R. Swicker
Copyright © 2002 Bruce R. Swicker, "The professional's insurance professional!"